Glu Mobile Expands in China

Mobile-gaming company Glu Mobile(GLUU Quote) said Wednesday it has agreed to buy Beijing-based MIG Information Technology in a move to strengthen its presence in one of the largest markets worldwide.

Shareholders of MIG, a mobile-games developer, will receive approximately $14.7 million in cash, with additional payments of up to $25 million in cash and stock upon achievement of certain financial milestones during 2008 by MIG, according to the agreeement.

The acquisition means Glu will pick up 80 employees at MIG's offices in Beijing and Hefei.

Glu estimates that China has more than 500 million cell-phone subscribers, making it one of the largest markets for mobile gaming.

"It's a good move for Glu, because when you talk about markets like Asia, it is tough to get in as content providers because cell-phone operators tend to use local players," said Tuong Nguyen, senior analyst for Gartner.

"That's why people like Glu or even Electronic Arts(ERTS Quote) aren't top-tier content providers in this market."

The latest acquisition should help the company gain momentum in Asia, said Greg Ballard, chief executive officer and president of Glu Mobile. He said buying MIG will also help strengthen its relationship with China Mobile, the largest wireless carrier in China.

"Just based on the number of subscribers, China Mobile is the largest carrier in the world," said Ballard, "and everywhere that we have been successful it has been only because we had a direct relationship with the carriers, which was not the case in China so far."